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Renting solar for your home? Here’s how to insure it

Insurance 101

A few tips for insuring your rented solar system properly.

You’re renting solar? Or at least thinking about it? Nice! Not only will the lights always be on, you can bid farewell to Eskom-se-push and free up some memory on your phone. Many lease agreements for rented solar highlight that you are responsible for insuring your rented solar system.You might be wondering why you'd need to insure a system you don't own and a part of that is understanding what risks you face in renting such a system. Once you've got your head around that, how do you even go about it? Hence, this blog 😉.

Why am I responsible for insuring the solar system I’m renting?

Many rental agreements state that you carry the risk of loss, damage or liability of the whole solar system once it’s installed. This means if something happens to your system, or there is damage caused to someone’s property because of your solar system, you will need to pay to replace it from your own pocket. Most of us don't have that kind of cash lying around, but luckily insurance can help.

What are some of the things that insurance will protect you against?

Theft and vandalism:

Solar panel theft is a growing concern, primarily because of their increasing value and demand. Acts of vandalism can also result in the system being damaged or entirely ruined.

Weather-related damages:

Solar panels are exposed to the elements, making them vulnerable to weather-related damages, such as storms or hail. South Africa, in particular, has experienced weather conditions that damage solar systems.

Fire:

Though rare, there have been instances where solar panels have been the culprit in causing roof fires. If the system is not installed correctly, electrical issues can arise, leading to fire hazards.

Liability:

In the event of an accident related to the solar panels that could result in other people being injured or their stuff being damaged, liability coverage will protect you from potential financial consequences.

Heads-up: Wear and tear and deterioration of the solar system is not covered by insurance. It’s important to make sure that the solar system company sticks to their end of the agreement and maintains the system where necessary.

How to insure a rented solar system:

Firstly, it's important to understand the terms of your lease agreement with the solar company to make sure that your insurance coverage meets them. It's also possible that the solar company carries some insurance on the panels. You need to understand what this insurance covers so that you don't pay for overlapping coverage. For example, if the company's insurance covers damage or loss during transportation and installation, your policy only needs to start coverage after the installation is done.

Next, if you don’t live in a sectional title, ask your insurer to add the value of the system to your overall sum insured. When you rent a solar system, it becomes a part of your house, even though you don't own it. So it should be as simple as increasing your home sum insured by the replacement value of the solar system. You can usually find this value in your lease agreement. Just make sure that the amount includes installation fees, as you will also be responsible for the cost of putting the panels back up if something happens to them.

If you live in a sectional title, ask the body corporate to increase your sum insured. If you own a sectional title unit, the body corporate or the managing agent usually buys a single insurance policy on behalf of all owners to cover their buildings. In this case, if you have added any permanent fittings to your unit like solar panels, the recommended route is to notify your managing agent/body corporate. Tell them that they should increase the sum insured of your unit's building cover to explicitly cover your alternative energy valuables. It’s important to get confirmation of this to make sure that you are fully covered.

A few other things to remember

1. Annual value check:

Each year, remember to check with the supplier what the replacement value of the system is. The value might increase or decrease. Then make sure you adjust your insured value to keep track.

2. Excess and premiums:

A higher excess typically means lower premiums, but you'll have to pay more out of pocket if you file a claim. It's crucial to strike a balance between an excess amount that allows you to afford your monthly premium and an amount that you are still able to pay at the drop of a hat in case something bad happens.

Supplier responsibilities:

What responsibilities does the supplier have regarding maintenance and support? Remember that insurance doesn’t cover wear and tear and deterioration at all. It also doesn’t cover any loss or damage as a result of wear and tear. It’s important that your service provider does all it can to maintain and service the system.

Warranties and guarantees:

Ask the supplier about the warranty or guarantee in place. Anything that, as a rule, would be covered under a warranty or guarantee won't be covered by your insurer so ask what the supplier has in place in terms of a warranty or guarantee.

Loadshedding and power surges:

Ask the supplier what happens if your panels stop working due to a power surge? We live in a country with load shedding that makes power surge more likely and different insurers give different levels of cover for this risk. For example, some insurers cover power surges but generally this has to involve a massive surge in power that fries multiple appliances at one go. A system or appliance dying after wear and tear that has been sped up thanks to loadshedding won’t be covered.

You don’t want to go through all this effort to keep your lights on only to lose a whack of money replacing a system that you don’t even own! Now that you know how to buy the correct cover, there’s nothing standing in your way. Especially if you choose to get Naked – an insurance quote for your home will take less than 90 seconds online and we can even help you to cancel and switch your insurer.

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